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Strategies to Profit From Corporate Spinoffs

The Big Synchrony IPO Calls Attention to Various Ways to Invest in Such Deals

By

Liam Pleven

Updated Aug. 1, 2014 5:25 p.m. ET

Synchrony Financial, a former General Electric unit, made its trading debut on Thursday in the largest U.S. initial public offering of the year, shining fresh light on a wager that has long drawn Wall Street's attention: investing in spinoffs.

The share prices of onetime subsidiaries can outperform the stock market in the months after becoming independent publicly traded companies, though they also sometimes lag behind the market initially, researchers have found.